Lake Norman Real Estate’s November 2010 Sales Analysis

Despite a pretty rough month of economic news, here in Lake Norman we actually had some news to be thankful for in November!

As I anticipated last month based upon the higher numbers for Conditional and Pending home sales in our Lake Norman area, we posted some relatively strong numbers in November when compared to last year and even the year prior to that:

The total number of Lake Norman single family homes under contract (but not yet closed) on November 30, 2010 totaled 169 which is a drop of 13% from last month’s high but still 8% higher when compared to August’s and July’s numbers of 157, equal to June’s 169 and 15% below May’s closings.

Here are the details:

Active Listings dropped another 15% from a year ago. Based upon our November closed sales, we now have 14.8 months of inventory. While our goal of a truly balanced housing market of 6-8 months of supply is still out of reach this is the strongest absorption rate we have had since I started doing these sales analysis in early 2007. To achieve these numbers given our current inventory levels we will need to sell about 140 homes per month. Clearly we need to have a combination of increased sales and decreased levels of active listings in order to return to a balanced market. However, it is very good news that our inventory is continuing to shrink to record lows each month. Note that the average price of our active listings dropped 15% compared to November 2009. We continue to see a number of price reductions

Contingent Sales, which don’t account for a significant segment of our housing market, increased by 20%. This only represents two more properties so clearly most sellers are not willing to accept an offer contingent upon the sale of a buyer’s home due to the overall weak housing market.

Conditional Sales increased 44 % this month when compared to November 2009. These are homes that just went under contract and still have financial and inspection conditions. They will represent closed sales in either late December or January and would seem to indicate that the sales in Lake Norman in the next month or two will be substantially higher than last year’s numbers. This is the strongest trend we have seen for a long time!

Our pending sales represented a 9% decrease from a year ago. These are the contracts that are past inspections and are just waiting to close. Pending sales are usually the best indication of closed sales in the next few weeks. These numbers would indicate that our closed sales this month will be equal to or slightly lower than both last month and December of 2009.

The number of closed sales increased 21% compared to 2009 and our average price was up 21%. It is important to consider that this increase in the average sales price represents a strengthening of our higher-priced home NOT an increase in our overall prices.

Here is a breakdown by price-range of our November 2010 closed sales in Lake Norman’s area 13- to 13-5:

In October, 61% of our Lake Norman home sales were under $400,000 and 77% were under $600,000. Last month 51% of our home sales were under $400,000 and 68% were under $600,000. Note that our current Lake Norman properties under contract just about match November’s numbers and continue to reflect a higher-end niche of our market that is showing life for the first time in several years. Waterfront homes make up the bulk of the higher-end home sales right now. As prices come down buyers are scooping up these properties realizing that they may not see these prices with such good quality of water again. It will be very interesting to see if this trend continues into the winter months.

6-Year Comparison of Lake Norman Home Sales By Month

* Please note that all of my numbers come from the Charlotte Region Multiple Listing Service and will not include sales that took place outside of our MLS.

**I have made an adjustment of the totals reflecting the ACTUAL sales every month in 2009 and 2010 and the totals in the prior calendar year. The columns may not add up but I do my best with what I have to work! I also adjust past months when I do the monthly update as a few more sales are usually input late by agents.

Summary

Here is a snapshot of Lake Norman home sales numbers in the context of the past 6 years. Our 2010 November sales were 21% higher than 2009 and 65% greater than 2008. We are already 4% higher in total annual sales for 2010 compared to 2009 and, based upon our current number of Lake Norman properties under contract, it looks like we will match the overall 2008 numbers.

It is also worth pointing out that if we close about 75 sales this month it will be the strongest December since 2006! In my opinion, significant price reductions are inspiring buyers to jump off the fence. It will be a very interesting winter!